The FDA says it found significant amounts of a contaminant in the heparin active ingredients used by Baxter, which came from Scientific Protein Laboratories LLC of Wisconsin and that company’s China joint venture, Changzhou SPL. It is still unclear what the contaminant is and how it ended up in the heparin. It is also unclear whether the contaminant is the cause of patients’ allergic reactions to Baxter’s heparin.

Changzhou SPL registered itself in China as a chemical manufacturer rather than a drug company. As such, it doesn’t fall under the jurisdiction of China’s State Food and Drug Agency. The U.S. FDA, in an oversight, also failed to inspect the facility when it began making the active ingredient for the U.S. market.

The Journal reports on the extensive pharma production operations in China, and traces the problem back to the unregulated slaughterhouses from which key ingrediants flow:

The process of heparin production has a grisly start in workshops that extract crude heparin from the intestines of slaughtered pigs. These crude heparin producers operate with essentially no oversight by Chinese health authorities. Many are small, rudimentary operations in farming communities.

The output of these heparin producers is bought up by trading companies, and may change hands several times before it ends up with consolidators who sell it in bulk to drug companies.

For the heparin supplied to Baxter, Changzhou SPL says that it relied on two wholesalers who bought heparin from six to 12 smaller workshops. Scientific Protein says it can trace supplies back to the slaughterhouses where the workshops got their raw materials.

Chinese big pharma is about to meet the American tort bar, and this is one of those occasions where the plaintiffs’ bar is going to actually do a lot of good.